There’s really not much new to say about the fiscal cliff except that, as of today, we’re now three weeks away from it happening. There’s especially not much new to say when the only news is that a meeting took place at the White House over the weekend between the president and speaker and the big statement was that the lines of communication remain open. No additional meetings have been scheduled.
A deal is still possible, of course, although the grand bargain/big deal/legacy agreement that never was very likely to begin with now appears to be all-but-impossible to achieve. Even if Obama and Boehner could agree on something like that, the chances of translating it into legislation and getting enough votes to pass it in the House and Senate before the January 1-2 fiscal cliff deadlines are very, very small. I’m not surprised by any this: I’ve been predicting since September that we were more likely to go over the cliff than prevent it and my odds of that happening have only gotten better (or is it worse?) since Election Day. For the record, I still think there’s a better than 60 percent chance that we won’t get any deal by January 1, and I’m very close to raising that number.
The chances of getting a big deal are only about 5 percent, and I’m being generous.
That makes it time to start thinking about what happens next, that is, what if we do go over the cliff.
Here’s the first installment.
The negotiations won’t stop; they’ll just move into the next stage as the new Congress gets sworn in and becomes more Democratic; as the tax increases and spending cuts technically go into effect; and as the news focuses on how taxpayers, companies, government contractors, federal departments and agencies and federal employees start to respond to the changes even f they haven’t been fully implemented.
This will make the period between the start of the new Congress on January 3 and the Inauguration, which usually is uneventful to the point of being somnambulant, a whirlwind of post-fiscal cliff-related activities with every member of Congress doing whatever they can to reassure their district or state they are doing everything they can to deal with the situation. Hearings, press conferences, floor statements, town hall meetings, symbolic votes, demonstrations, etc. should all be expected.